Fed sees scope for another rate rise
The US central bank remains concerned about persistent inflation, while investors respond more cautiously.
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The Federal Reserve is considering another interest-rate rise before the end of the year. This is shown by the minutes of the 15 and 16 September meeting, at which the central bank had already raised its policy rate by a quarter of a percentage point.
All twelve voting members of the policy committee supported raising the range to 3.75 to 4 per cent in September. According to the minutes released on Wednesday, most participants felt that another rise would probably remain necessary if inflation did not fall sufficiently.
The Fed stressed that inflation is still above its 2 per cent target. At the same time, the US economy continues to grow, according to the central bank, and the labour market held up. The unemployment rate was 4.1 per cent in July and August, 0.3 percentage points lower than the average in the second half of last year.
The minutes show that there is also uncertainty within the committee about how powerful interest rates are as a brake on the economy. Higher rates make borrowing more expensive for households and companies, but can curb demand and thereby moderate price rises. Participants differed over how quickly that effect would become visible.
On Wall Street, the main equity indices closed lower on Wednesday. Investors had previously reached record levels, but responded more cautiously after the minutes made clear that rates could remain high for longer. Companies that depend heavily on cheap credit could be particularly affected.
Interest rates also carry political weight. President Donald Trump has repeatedly called for lower rates, while the Fed operates formally independently. The minutes contain no indication that political pressure influenced September's decision: the rise was approved unanimously.
The next meeting is scheduled for 27 and 28 October. The minutes provide no certainty that rates will be raised again then. The Fed links future decisions to new figures on inflation, employment and economic growth.
One story, several perspectives
What is established
- The Fed raised rates in September to 3.75 to 4 per cent.
- According to the Fed, inflation is still above the 2 per cent target.
- Most participants considered a further rise potentially necessary.
Left
Arguments Another rate rise could place additional pressure on households with high housing costs and debts. According to this approach, greater emphasis should be placed on affordability, employment and targeted measures against price rises.
Values Social protection, income security and a broad distribution of the economic burden.
Consequences Overly restrictive policy could slow growth, delay investment and place further pressure on vulnerable households.
Centre
Arguments The Fed must safeguard its dual mandate: price stability and a healthy labour market. Decisions should be taken gradually and on the basis of data, with room to change course when new figures emerge.
Values Institutional independence, predictability and balance.
Consequences A moderate approach could stabilise inflation expectations without causing an unnecessarily deep economic slowdown.
Right
Arguments Inflation erodes purchasing power and must be tackled credibly, even if that causes temporary pain. The central bank must not be guided by political pressure or the desire to keep borrowing cheap.
Values Monetary stability, fiscal discipline and responsibility towards savers.
Consequences Waiting too long could make a harsher intervention necessary later and undermine confidence in the currency.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
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This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The core claims can be traced directly to the Fed and AP. Interpretations concerning credit-sensitive companies are presented as consequences rather than established facts.
- confirmed The Fed raised its policy rate by 0.25 percentage points in September, to 3.75 to 4 per cent. — Mentioned in the official FOMC minutes. source
- confirmed The rise was unanimously supported. — The official vote was 12 to 0. source
- confirmed Most Fed officials possibly expect another rise this year. — Summarised by AP on the basis of the minutes. source
- confirmed The unemployment rate was 4.1 per cent in July and August. — Included in the official minutes. source
- confirmed US equity indices closed lower on Wednesday. — Reported by AP. source
Editor's note
The rate decision, inflation concerns, labour-market figures and date of the next meeting have been confirmed. The market interpretation remains an interpretation of investors' reactions.Sources
- Minutes of the Federal Open Market Committee, September 15–16, 2026 — Federal Reserve
- Fed minutes: Another rate hike likely coming this year to combat persistent inflation — Associated Press
- Wall Street retreats from its record as stocks fall worldwide — Associated Press
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